Posted by: johnhourihan | March 17, 2014

Big business forced government to get big


Risk is the key.
In capitalism, the main problem is to minimize our risk.
That isn’t my idea.
It is the idea of Henry C. Wallich (economic adviser to Dwight Eisenhower) and John Kenneth Galbraith (economic adviser to John Kennedy).
Risk is the problem for big business, for labor unions, and for the people who work for the big businesses.
The problem is we love our freedom. Businesses want the freedom to hire and fire and survive, and workers want the freedom to work or quit and survive.
And within our free society we want to be able to exercise our freedom without losing our business or starving to death on the streets.
Capitalism works fine, free market and all that, as long as there are no major fluctuations: Such as in supply, demand or price. That is the risk.
Now, according to those two economists I mentioned, as businesses in the U.S. got bigger after the World War, and labor got bigger, the people got caught in the middle.
There was power in business. There was power in big labor. The people had no power.
In an attempt to mitigate their risk factors, corporations convinced politicians that some things had to be allowed. Monopolies helped (we do still have some) and tariffs on incoming goods protected businesses from countries who could sell the same stuff at lower prices. Advertising, price or production agreement (cartels), price fixing by law, restriction on entry of new firms, quotas as well as tax loopholes and outright tax breaks and subsidies all helped big businesses mitigate the risks associated with capitalism.
This was good. It allowed big business to grow even more.
Nothing wrong with all this. It takes away the uncertainty that would otherwise cripple capitalism and force big businesses to go under.
But there is another side of this risk.
That is,  according to these two major economical voices, that long ago if you got laid off from your job you could go home to your farm and live off the land. So when businesses had a slow time they could continue to make more profit if they just laid off a large part of their workforce. If people got old they could just fire them. They could pay women less than men, and they could hire children at half the price. And they could make people just work harder and longer hours and more days to make the profit they wanted.
Labor unions grew and fought against these practices, then as the unions got too big, they began to act more like a part of big business than the protectors of the workers. Again, people were left with no power.
As big business and labor grew large, the government was forced to grow also, in an effort to protect the working people from both.
It was another example of checks and balances.
Government had to get big to cope with the problem. So it did. Government got big to control business, not the people.
We were no longer an agricultural society dipping our toes into industrialization. That had changed forever.
We had become a society largely living in or near cities. We no longer had anywhere to fall back to when a greedy business decided to make more profit by cutting back its work force and making the people they kept on work harder.
Labor unions helped at first, but as labor got larger and larger and more a part of business something needed to happen to mitigate the risk for the American people.
In order to mitigate the risks for workers in a capitalist society, government had to add safeguards. It was only fair. Government had done it for businesses.
Unemployment benefits, housing subsidies, food stamps, and heating subsidies, Social Security, Medicare, and now the ACA, were for the workers what tariffs, quotas, price fixing, cartels, loopholes, tax breaks, monopolies and the like were for corporations.
Today, big business wants to end this equality of opportunity.
They want to keep their protections against risk but take them away from the people.
How are they doing it?
Through advertising – it has always been their major weapon.
Back when the US first became an “affluent “ society – a society that had what it needed – businesses carried on through advertising. Businesses made people who had a can opener believe they needed an electric can opener.
Today, through advertising on the Internet, (mostly through bought-and-paid-for 501(c)4 organizations, who are allowed to spend billions and who are not held to telling the truth, (or paying federal income taxes) big business is convincing some in the middle class that they should cut down government by wiping out all the protections the workers have.
Why?
I believe it is so in this time of need we don’t see where the real waste is and make them cut back on their subsidies, quotas, price fixing, loopholes, cartels, special interest rates, and anything else that mitigates their risks. There is infinitely more money there than in the paltry one percent of the national budget that is Welfare.
Now corporations have convinced some of the American people who haven’t yet fallen through the cracks, to turn on their brothers and sisters who have and demand that their safeguards be taken away.
Or maybe big businesses don’t want us to take a good look at who is calling for wars. Wars cost the taxpayer trillions but enlarge the profits of businesses by the same amount.
Big business want us to believe the country was much better off back before labor unions became powerful and people could actually survive even if the got fired.
So that is who they are attacking big government, poor people, unions and a president who is trying his best to keep us out of wars.
Through this false “advertising”  they have turned us against ourselves, our brothers and sisters, and the people trying to protect us.
And we are helping them do it.

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Responses

  1. I kind of knew that business, unions, and government all got too big. I never could explain it, even to myself. Thanks for putting it in perspective. Although I’m sure people in big business or unions or government will surly take exception.

    • This is a turning point. Business and conservative government have manged to turn the people against themselves and are preparing to watch them self destruct. the tea party is the murder weapon.

  2. Very interesting…

    Charlie


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